Mind Tricks: Saving Money for that Holiday

Bad spending habits are just that: habits. And habits can be broken. With a shift in thinking, a little planning and some glossy holiday brochures as the dangling carrot, you’ll soon find yourself saving money and taking off for a fortnight of holiday bliss.

1.  Set your sights

We aren’t kidding: get yourself a visual reminder of your financial goal to encourage saving. Choose the most tantalising pic of your dream destination and make it your desktop wallpaper

2. Break it down

Planning is key to saving money. Break down your holiday expenses. Be detailed and realistic. You need to know how much you require and how long it will take to get it. By having a plan, you will start following it and when you get on holiday, you'll add to the break bliss by not having to worry if going over budget.

3. Separate your savings

Consider a separate account for your holiday savings, one with high interest and limited withdrawals. Work out how much you need to set aside each payday then schedule an automatic transfer. The money will be safely set aside before you even realise it’s there.

4. Spend with your head, not your heart

Set up direct debits for your big-ticket items: mortgage, utilities, insurance, etc. What’s leftover is your spending money until the next pay check. Use it wisely – when it’s gone, it’s gone. Separate wants from needs. Wait 24 hours before making a purchase. Keep track of everything you buy. There are apps to help with that last one. By tracking your spending you’ll make it less impulsive and more rational.

5 . Use cash, not cards

Money saving psychology says use cash, not cards. Cash is tangible – you can see it, touch it, smell it. When you have to hand it over you feel its loss. With cards, the value of money is less tangible. Paying with cash makes us think twice about a purchase – and not buying today means saving more for tomorrow.

6. Reward yourself

You know what they say about all work and no play. Your holiday is your big money saving carrot, but you’ll need some smaller ones to crunch along the way. Set milestones. When you reach them, give yourself a reward – but keep it in proportion. Maybe something you want to take with you, like a travel book or new bathers. There's research that shows how saving money can make people happier than spending it. Sure, delayed gratification is hard to begin with. But it gets easier – and more addictive. Before you know it, these money-saving tips will whisk you out of the red… and into the sun.